September 2015
1.
The following guideline applies to the definition of an essential public asset at Part 1: Definitions and
Interpretation of Natural Disaster Relief and Recovery Arrangements Determination 2012 Version 2 (‘the
determination).
2.
An essential public asset must be an asset of an eligible undertaking. While ordinarily assets related to infrastructure such as rail transport and provision of utilities such as water, sewerage treatment and electricity are essential, these are only essential public assets where they are owned by an eligible
undertaking (see Part 1: Definitions and Interpretation of the determination).
3.
The following list provides examples of assets that the department would generally consider to be
essential public assets:

Public schools

Public hospitals

Public housing

Roads

Roads infrastructure, e.g. road signs, guard

 rails and traffic lights
Bridges
Tunnels





Culverts
Levees
State or territory government offices
Local government offices
Stormwater infrastructure

Prisons/correctional facilities

Police stations, fire/emergency services facilities
4.
Further, only those costs associated with repairing or rebuilding the asset itself are eligible for reimbursement under Category B. This does not extend to the costs of replacing the contents of the
essential public asset.
The following list provides examples of assets which the department would not generally consider to be
essential public assets:

Sporting, recreational or community facilities (for example, playgrounds and associated facilities)

Religious establishments (for example, churches, temples and mosques)

Memorials.
5.
Where a community has been severely affected by a natural disaster a more holistic approach towards the recovery of a community is available under Category C. Community facilities considered to be essential to restoring the social fabric of a community may be restored as part of a community recovery fund (see clause 5.4.3 of the determination).
Essential Public Asset Restoration or Replacement 1

6.
Further information relating to the essential public asset pre-approval process is located in
Attachment C—Essential Public Assets Approval Form, of the determination.
7.
In order to claim costs associated with the restoration or replacement of an essential public asset, states and local governments must be able to prove that damage has occurred as a direct result of an eligible
disaster.
8.
Where it is evident that an asset has been directly damaged by an eligible disaster, costs associated with investigative techniques (i.e. geotechnical testing) used as part of the restoration project—for example, to determine the extent of that damage and/or identify the reconstruction option—may be eligible to be claimed for reimbursement.
9.
State expenditure associated with investigative techniques used to prove the existence of damage or the cause of damage to an asset is not eligible to be claimed for reimbursement as it is considered to be an ordinary administrative overhead of the state.
10.
Responsibility lies with the state or local government to prove that an essential public asset suffered direct damage as a result of an eligible disaster, and where possible this can be demonstrated by photographic evidence supporting the condition of the asset prior to and following the eligible disaster.
11.
In accordance with clause 4.4.1 of the determination, state and local governments are to develop and implement disaster mitigation strategies in respect of likely or recurring disasters. Evidence of appropriate disaster mitigation strategies must be provided at the time a state submits a claim or acquittal under the determination.
12.
The ‘pre-disaster standard’ of an essential public asset is considered to be the condition of the essential
public asset and its level of functionality or utility prior to the eligible disaster (that is, as established within the previous 12 months). In the case of a road asset, the pre-disaster standard includes factors such as traffic and vehicle capacity, classification and/or role of the road within the road network, signage, street parking, road width and number of carriageways—for example, a gravel road is replaced using gravel and not bitumen or a two lane road is replaced with a two lane road and not a three lane road.
13.
The allowance for ‘current engineering and building standards’ under the determination is intended to allow states and local governments a modest level of flexibility to utilise contemporary (rather than requiring the use of obsolete or outdated) construction methodologies and building materials—for example, in the case of restoring or replacing a timber bridge asset, this may include using concrete or steel instead of timber.
14.
In the situation where a damaged essential public asset cannot be restored or replaced in the same way, for example due to site constraints, consideration may be given to a reasonable alternative with agreement of the department.
Improvements or enhancements to an essential public asset
15.
It is recognised that the restoration or replacement of an essential public asset following an eligible
disaster provides an opportunity for a state or local government to provide complementary funding towards restoring or rebuilding that asset to a condition beyond its pre-disaster functionality or utility— for example, improving or enhancing the size, capacity, strength and/or resilience of the asset.
Essential Public Asset Restoration or Replacement 2

16.
State expenditure related to the eligible measure of the works—that is the proportion of costs that would have been incurred to restore or replace the essential public asset to its pre-disaster functionality or utility—may be claimed for reimbursement. Costs associated with the complementary works or activities to improve or enhance the pre-disaster functionality or utility of the essential public asset are the responsibility of the state or local government.
17.
Examples of improvements or enhancements that are not eligible under the determination include, replacing undamaged guardrails with new standard guardrails, including new traffic calming devices, widening the carriageway of a narrow single lane road, adding kerbing, or including storm water drainage where none existed previously.
18.
Where a state seeks to include costs associated with the restoration or replacement of an essential public
asset as state expenditure in a claim to the Department, the state must be able to demonstrate that:
 the asset meets the definition of an essential public asset at Part 1 of the determination; and

state expenditure being claimed represents the cost associated with restoring an essential public
asset to its pre-disaster standard and level of functionality and utility.
19.
It is the responsibility of the state or local government to clearly differentiate eligible costs from ineligible costs under the determination (and therefore subject to complementary funding).
20.
Where pre-existing damage or poor condition from a lack of maintenance have been a significant contributing factor to an essential public asset being damaged by a disaster the state must provide appropriate complementary funding for reconstruction costs.
21.
Where complementary funding has been provided, the state or local government is required to establish a base-line cost that can be evidenced in audit for the eligible component of works. This cost represents the maximum claimable amount under the determination in relation to an asset to which improvements or enhancements have been made.
22.
In the event of uncertainty or lack of clarity regarding the eligibility of an asset or components of an
essential public asset restoration project, the state should seek advice from the
department before commencing restoration or replacement activity.
23.
Providing approval or otherwise to the overall scope of a project does not preclude the department from identifying ineligible costs on completion and acquittal of the project.
Aaron Verlin, Assistant Secretary
Attorney-General’s Department
E-mail: recovery@ag.gov.au
First date of issue: 18 December 2012
Essential Public Asset Restoration or Replacement 3